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Over a long period of time the trend is strongly in favor of owning due to inflation and paying off the property, but it's not the case everywhere (rent controlled apartments being one classic example.)
At the present time, I'd have to say the average person is better off renting than owning. There are a lot of costs with owning that many don't consider, beyond payments, taxes and insurance. Maint. and repairs can get expensive on a used house. Add heat, electric, water, sewer and garbage, and any homeowner association dues. Cost of purchase and selling also can also be pretty steep, depending on how often you have to move.
My new philosophy is rent small. Lots of the space in your typical house is used just to store junk, or to entertain people who may or may not come to visit. Or only visit once a year.
Finally, it used to be a given that a house would appreciate in value. That is no longer true, and in fact, your house may actually depreciate, depending on how your local economy does in the future, and when you end up selling.
I agree with you, renting for most is more frugal. I found out from experience too after owning 2 homes during my life- owning a house turns into a money pit owning ME!
Never again. From now on, I just "borrow" other people's property for a while. Easier for me and when something breaks I smile cuz it's not on my dime anymore... YEAH!
Buying is much cheaper. Ten years of renting a $750 apartment will set you back $90,000 and you have nothing to show for it. 20 years $180,000 or higher with rent increases. 30 years $270,000 and you could have had the mortgage paid off by then and have property that you own and can sell worth of value rather than nothing.
Your rent could double or triple after the lease is up, your super or landlord can enter your unit when you are not there and snoop[ around and possibly steal things.
You can buy the same size condo is some places for $50K get a cheap 30 year loan and if you have a place that is well run with low HOA's you are set for life.
Buying is cheaper assuming that everything goes well and your house is built right. That hasn't been my experience so far. We bought a house because that was always my husband's ultimate goal. The house was new when we bought it, because he didn't want to have to deal with a lot of repairs at first. A year after we bought it, the slab foundation cracked down the middle and the front half of the house started tilting down the hill. We had a warranty on the foundation, so we spent several years trying to get the warranty company to repair the house. They wouldn't fix it until it got really bad, and then we had to put all our belongings in storage and move out for the repairs. (The warranty covered the repairs, not the moving, storage or our living expenses while we couldn't live there, and our homeowners insurance did not cover that either.) And they're still building in our neighborhood and selling the new houses for about as much as we owe on our house, which means it would be totally impossible to sell our house.
I will say this, I've learned to do lots of little repairs...I can fix the stove, the washer, the fridge, and I can replace a toilet. I can fix some things that go wrong with the air conditioner. I'm about to learn how to replace the pressure-reducing valve for the water line that comes into the house. I'll learn more as things keep breaking, because it seems to be never-ending. And at some point I'll have to paint, replace carpets, and do other updates to keep the house looking decent, the things I never had to do with an apartment because we just moved out when it started looking shabby.
To me, home ownership is a lot like parenthood...we're told that we're not really full adults until we've reached that milestone. But that's because it's hard work and a pain in the butt, and everyone who's already doing it wants to see everyone who's not tied down like that lose their freedom too.
Thats too big of a blanket statement to say one way or the other, depends on so many factors like the area, how long you plan to stay, if you'll be buying a condo, SFH, TH, etc.
I'm sure people will post articles laying out numbers saying its better to rent and others will find articles and post saying more frugal to buy, you can really twist stats to show anything you want.
For me personally I have dogs so renting is a big more difficult. Also I hate "throwing my money away on rent" I know thats cliche and its not throwing your money away you have a place to live but I'd rather build equity.
I think its somewhat similar argument to should I lease or buy? Different in the sense that a car is a depreciating asset and a home isn't quite so but still the do you want to build equity and have something when your done paying it off or do you just wnat to pay for a place to sleep or a car to drive while your paying for it.
I bought a home some years ago, I had a few buddies living with me basically paying the mortgage for 3 or 4 years. I then moved out but rented the place out and am not only building equity but my tenants are putting an extra $400 a month in my pocket on top of my mortgage so in my case I'm really happy having bought instead of rent
In the short run, renting is usually more frugal, by the time you figure in the down payment and maintenance, taxes and insurance from buying.
But in the long run, buying is much more frugal, when you consider that in the long run housing values eventually do typically go up, despite the anomaly of the last 10 years, and inflation lowers the value of the dollar, rents go up, but a mortgage payment (at least the P&I portion) remains constant. Also, eventually, a purchased house gets paid off, and the monthly obligation goes down substantially, which never happens with renting.
However, that is only true if you are going to stay in one place for a while. If you are someone who moves every 5 years, any frugality goes away with having to pay closing costs every time you buy/sell.
So TL DR:
Short term: Renting
Long term if you stay put for a long time: Buying
Long term if you move a lot: Renting
Normally I would say, all things being equal, I'd agree with owning being better. But a lot depends on circumstances and when you buy and when you sell. If you're in an area where the economy tanks, and you have to move to get a job, selling the house can be a problem, and you can end up taking a big loss. There are other circumstances, like if you find out you bought in a housing bubble, like the folks in Florida or Calif found out in 2008-2009. If its going to work out, look for potential for reverses in value. A lot of folks have gotten burned with home ownership. We did, so I speak from experience.
Plus someone cited the fact that rent ends up putting no value into your dwelling. Very true. But you also don't pay insurance on the housing or the taxes. In my case, that's $4000 a year at present rates. That's 120,000 over thirty years. Add on cost like water, higher AC and heat bills. It can add up over time also. Also you have to consider the cost of repairs over the years, and that isn't chicken feed either.
. But you also don't pay insurance on the housing or the taxes. In my case, that's $4000 a year at present rates. That's 120,000 over thirty years. Add on cost like water, higher AC and heat bills. It can add up over time also. Also you have to consider the cost of repairs over the years, and that isn't chicken feed either.
in MOST CASES (not all markets.... Some have too many rental properties and it's cheaper than buying... This equalizes in time) you ARE paying for all these expenses.... It's just in one big check every month called "rent" (+ profit to the homeowner)
Otherwise there would be no landlords!
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